What happened
Welcome to Day 2 of "365 stocks in 365 days." Today's pick: the stock most tied to what the Senate voted on this afternoon.
Tuesday afternoon the Senate held a procedural vote (scheduled for 2:15 PM ET) on whether to move to H.R. 3633, the Digital Asset Market Clarity Act. That step, called cloture, needs 60 of 100 votes. It didn't get there. CoinDesk's live coverage, citing the unofficial tally on the Senate floor webcast, reported more than 40 senators voting against. We didn't find a final roll-call number from the Senate or a major wire at the time of writing, so we're not putting one in.
Crypto stocks were already lower before the vote. Yahoo Finance and Parameter reported CRCL down more than 5% earlier in the session as prediction-market odds on passage slid. CRCL finished the day down 11.4%. Bitcoin was down about 3.3% and ether about 4.8% on the day as of about 4:35 PM ET (TradingView). The drop came one day after CRCL rose more than 4% in Monday morning trading (GuruFocus) when Senate Republicans released what they called a final draft.
Heading into the vote, reporting (CNBC, Sep 14; CoinDesk) described three open disputes: conflict-of-interest rules for senior officials' crypto businesses, including the president's family; liability for DeFi software developers; and whether crypto platforms can pay stablecoin "rewards." Banks lobbied against those rewards, arguing they'd pull deposits out of lenders.
What the vote does and doesn't mean: it's a procedural step, not a vote on the bill's text. The bill isn't formally withdrawn. But CoinDesk reported the failure essentially ends Senate market-structure work for 2026, with the calendar tight ahead of the elections.
What Circle actually does
Circle issues USDC, a dollar stablecoin. Each USDC is backed by a dollar held in reserves, mostly cash, overnight repo and short-term Treasuries. Circle keeps the interest those reserves earn. That's the business.
In Q2 2026 (reported Aug 5), total revenue and reserve income was $701 million, up 7% from a year earlier. Reserve income was $668 million of that, about 95%. The reserve return rate was 3.5%, down 66 basis points from a year earlier. USDC in circulation ended June at $73.3 billion, up 19%.
The catch is distribution. Circle paid $410 million in distribution and transaction costs in Q2. A lot of that goes to Coinbase: under their collaboration agreement, Coinbase gets the reserve income on USDC held on its platform plus a 50% share of residual income elsewhere. In 2024, $908 million of Circle's roughly $1.01 billion in distribution costs went to Coinbase (per Circle's IPO filing, as reported by Crypto Briefing and others). On its Aug 5 earnings call, Circle said the agreement had renewed on the same terms, running into 2029 (as reported by crypto.news).
After those payments, the Q2 revenue-less-distribution-costs (RLDC) margin was 41%. Net income from continuing operations was $48 million, against a $482 million loss a year earlier, and adjusted EBITDA was $143 million. Circle raised 2026 guidance for other revenue to $310-330 million (from $150-170 million) and RLDC margin to 41.7-43.7%, and kept adjusted operating expenses at $570-585 million.
That's why stablecoin rewards matter here. Those rewards are funded by the same reserve interest. The May 4 Tillis-Alsobrooks compromise banned interest-like payments on idle balances but allowed activity-based rewards, and CNBC reported Circle jumped nearly 20% that day. Today's vote leaves that question without a legislative answer for now.
Why rates matter more than you'd think
Circle's income moves with short-term interest rates, because its reserves sit in overnight and short-dated paper. The 10-year yield touching 5% on Monday for the first time since 2007 (CNBC) is a headline, but the Fed funds rate is closer to what Circle actually earns.
The Fed decides Wednesday. As of Tuesday afternoon, CME FedWatch had about 92-93% odds of a 25 basis point hike, to 3.75-4.00%. Scenario, not forecast: if short rates go up and USDC supply holds, reserve income tends to rise. If higher rates push money out of crypto and USDC supply shrinks, the gain gets smaller or disappears. The reverse applies when rates eventually come down. Circle's reserve return rate is already 66 basis points lower than a year ago, which shows how much of the story is set outside the company.
Where the chart sits
The weekly chart centers on one line: the 50-week simple moving average at about $88.80.
- In mid-to-late August the stock was rejected there, with weekly closes below it the weeks of Aug 17 and Aug 24.
- It closed above that average the weeks of Aug 31 and Sep 8. Last week's low of $89.50 held just above it.
- Tuesday it closed back below it, at $86.30. Whether the week ends above or below that line is what the weekly chart will record on Friday.
- The past-year low area is about $49.90, set the week of Feb 2, 2026.
- The IPO-period highs are far above. Circle priced its IPO at $31 in June 2025, and its all-time high came in its first weeks of trading, far above today's level.
These are reference levels, not predictions.
Two ways to read it
What bulls point to: GENIUS already gives stablecoins a federal framework, so the core business doesn't depend on CLARITY. USDC circulation was up 19% year over year in Q2, onchain volume was $14.8 trillion, and management raised margin and other-revenue guidance in August. A Fed hike, if USDC supply holds, would lift the yield on reserves. Circle also listed its Arc blockchain's public mainnet for Sep 16.
What bears point to: About 95% of revenue is reserve interest, which Circle doesn't control. A big share goes to distribution partners, led by Coinbase, under a deal that now runs into 2029. Morgan Stanley downgraded the stock on Aug 3, citing slower USDC growth and competition from tokenized money-market funds. And the rewards question is unresolved rather than settled in Circle's favor.
What to watch next
- Sep 16, 2 PM ET: Fed decision, press conference at 2:30, with new economic projections. The size of any hike and the outlook both feed into reserve yield.
- Sep 16: Arc public mainnet, per Circle's Aug 5 release.
- CLARITY next steps. Whether Senate leaders schedule another vote, or reporting firms up that the bill is done for 2026.
- USDC circulation. Circle publishes reserve and supply data regularly. Q2 ended at $73.3 billion.
- Q3 earnings. Circle hasn't announced a date yet. Last year's Q3 report came Nov 12, 2025.
Educational content only. Not investment advice.